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Fair Pay

What's the deal with Pay Equity, anyway?

18 Nuku 2022

When it comes to claims for fair pay, there’s a fair amount of jargon that gets thrown around. We talk about pay parity, pay equity. pay scales and translation matrixes. It can all be hard to keep track of and leave you going “wait, didn’t we already have a claim for this?”

There’s a good reason that these spaces are complicated though – because after all, it’s important stuff! If we’re trying to agree on minimum pay and conditions for a group, we need a way to be clear about the issues we’re solving and how we’re ensuring a fair outcome. Each one of these claims has an important part to play, and in the next couple of minutes, you will be able to answer the question: “what the heck is pay parity, anyway?”

First up, let's talk principles

Behind the mechanisms that we use to reach any kind of fair pay agreement are a few guiding principles that are important to understand.

The first and most crucial is the notion that equal work deserves equal pay. This feels like common sense, right? If you’re doing paperwork, or payroll, or teaching, or leading a team – you should get paid the same as other people doing the same work. You’re getting paid for the work you’re doing, and the value that you are creating. Sector, gender, age, race or any other factor that isn’t relevant to the actual input and output of your mahi shouldn’t affect your wage in any way.

History tells us that this isn’t quite the way that things play out in the real world. There are countless examples of workers doing the same or similar work with vastly different pay scales. There are many reasons for this, such as the impact of gender undervaluation, where so-called ‘women’s work’ is seen as of less value than ‘men’s work’. Often, it’s as simple as increasing work demands being passed onto an existing, underpaid workforce in the name of efficiency and increased productivity – without the wages increasing to match.

Entire books have been filled with a discussion of the above, but the key point for today is this: wages are decided not by fairness, or to reflect productivity, but through negotiation. This ultimately means that whoever has more power – and that is almost always the employer – sets the wage. This leads to the final key principle we need to understand to achieve pay parity: collectivism.

If you’re negotiating one-on-one with an employer, in a market where there’s 10 other people waiting in the wings hoping for the same job, how much leverage do you think you have when you ask for more money, or better conditions, or anything else that will ultimately cost the organisation more money? Yep, not that much.

As an individual, there’s almost always someone else who will do your job if you refuse to do it, and so your employer almost always has more power than you. However, if you stand together with your colleagues, or even as a whole sector, employers have to take notice. It sends a clear message that no-one else in the sector is going to accept less than what you’re all asking for – so if the employer wants to keep their business going they need to come to the table with a reasonable offer.

So, what's with all the different terminology?

There’s probably a dictionary of this jargon out there somewhere, but this isn’t that. Instead, we’ll focus on three key terms and how they fit together in this picture of equal pay for equal work.

Pay Equity

This one often gets confused with Pay Parity – so let’s clear that up. Pay Equity relates to the undervaluing of work that is, by and large, done by women. Jobs in some industries where the work is primarily done by women are paid less than industries that are male dominated. This can be traced back to the mid-20th century when a woman’s place was deemed to be in the home, and any work carried out for money was considered more of a hobby than ‘real work’ (yeah, gross).

In a Pay Equity claim, we use a legal process under the Equal Pay Act to figure out in which industries this is the case. We assess the specific tasks, expertise, and responsibilities people performing these roles have and compare those to equivalent roles in male dominated industries. Where it’s found that these roles are underpaid compared to their male counterparts, their wages are lifted up to the appropriate level. While not an exact science, this process has lead to significant recognition of history undervaluation for NZEI Te Riu Roa members which you can read more about here.

Pay Parity

The closely related cousin of Pay Equity, Pay Parity also seeks to provide a recalibration to workers who have been historically undervalued, but it’s a concept specific to the education sector. Primary teachers had for many years sought ‘parity’, or the same pay scale, as their colleagues in secondary schools. In the 90s, after a hard slog and lots of collective action through NZEI Te Riu Roa, this was achieved. Kindergarten teachers took serious action as well to get there in the early 2000s, and now all kindergarten, primary, and secondary school teachers are on the same base pay scale.

The fight is on now to make sure ECE teachers get there too! The ECE Voice campaign has been pushing this for almost 3 years now and made some significant progress, with many centres now paying the first 5 steps of the pay parity scale [link to media release and/or something pay parity related] and this set to expand in 2023, but there’s a way to go yet.

Part of the challenge in ECE is the number of employers of the sector. In primary, secondary and kindergarten there is effectively only one employer: the Ministry of Education, but in ECE there are literally thousands. This makes it difficult to achieve the scale required for kaiako in ECE to have any real power when setting their wages. That’s where Fair Pay Agreements come in.

Fair Pay Agreements

In simple terms, a Fair Pay Agreement (FPA) is an agreement which outlines minimum terms of employment for an entire sector. It is made possible by legislation which requires employers to come to the table as a representative group and negotiate terms in good faith with a representative group of workers. Once an FPA is established for ECE, no employers will be able to opt out of it, and it’ll be the first opportunity for kaiako across the sector to stand together and make their voices heard in one big agreement.

The game-changer in this legislation is that it will prevent the so called “race to the bottom” where employers look for the cheapest labour they can find to maximise their profits. Fair baseline standards will be established and, much like the minimum wage, employers in that sector have a legal obligation to meet those minimum standards for all of their employees. In ECE, we’ll be seeking to embed pay parity, and the results of the future pay equity settlement, through a Fair Pay Agreement - alongside other core conditions for ECE teachers.

It’s important to note that these are minimum standards. There is no reason that an employer couldn’t offer better conditions in an effort to make their workplace more desirable. It is simply an agreed and documented understanding of what the work in that sector is worth. Simple as that.

While it is never a simple equation to determine what work is worth, that should not become a reason that people are underpaid, undervalued and under undue pressure to provide for their families. Pay Equity, Pay Parity and Fair Pay Agreements are the best tools we have available right now to make work fair for everyone.

Keen to be a part of getting an FPA in ECE?